2008 is an important year for Sony investors as it was the last year the electronic giant made a profit.  As predicted, Thanks to sales of its NYC HQ for $1.1 billion and Sony City Osaki building for $1.2 billon, in conjunction with a weakening yen, the company has been able to double its net profit. For the 2012 calendar year, Sony managed a net profit of 43 billion yen – $458 million. While encouraging news, a big portion of the profits are credited towards the mentioned sales, making 2013 Sony’s first year to profit from products they actually sell. Due to that, Sony expects its operating income to remain flat with a net profit of 50 billion yen – $506 million. Revealing to investors at a conference call, the PlayStation 4 is expected to play a large part in Sony’s continued recovery.

Masaru Kato, Sony’s chief financial officer, told a news briefing:

 Selling assets wasn’t just about helping our balance sheet. It is part of a strategy to revamp our business portfolio 

Despite a revised line of televisions, TV sales were down 38% though they fell in line with industry trends which saw Samsung and LG experience the same percentage decline. Sony hopes that an aggressive expansion to 4K televisions will help it curb the trend and help return the long bleeding division back to profitability. With a disastrous 2012 year for televisions which had sales dip to 13.5 million, sales for the year should bounce back nicely to 16 million. In 2011, Sony managed to sell 19.6 million units though the division hasn’t been profitable since 2008.

A bright spot for Sony was its newly revamped mobile devision which since January has released praise worthy devices like the Xperia Z and ZL smartphone, and Xperia Tablet Z. Despite 33 million units sold in 2012, the division still saw a loss which is mainly attributed to the transition from Sony Ericsson to Sony Mobile. For the 2013 calendar year, Sony expects to ship nearly 10 million more units, resulting in 42 million smartphone sales worldwide which will include their new Z lineup. This would give Sony 4% of the market where main rivals Apple and Samsung together control more than 50% of the market and 90% of the profits. The US continues to be an allusive market for Sony where Sony only managed to capture 1% of smartphone sales.

With Sony’s own smartphones gaining powerful cameras like the Xperia Z which features a 13-megapixel sensor, consumers are turning less and less towards digital cameras. Due to this, Sony expects digital camera sales to be down 20% for the year to 13.5 million.

Gaming continues to be on the decline for Sony. With the nearly 10-year PSP, slow-selling PS Vita, and soon-to-be-replaced PS3, the division saw a 12.2% decline, compared to the year prior. Things don’t get any better for Sony’s portable gaming ambitions as despite a tight integration with the PS4, Sony still expects to see PS Vita and PSP sales to fall by nearly 30%, down to 5 million. With a price drop already for the Vita in Japan and a expected one for Western gamers at E3, 2014 could be a deciding year for the powerful portable as the PS4’s direct tie in won’t directly affect Vita sales till the following year with better system availability.

If Sony can continue to make good on its promise of tighter integration between products and more aggressively pursue the US market, 2013 can be a pinnacle year for Sony and set the company on track towards a bright 2014.

Discuss:

Where should Sony go from here?